select
|

Are you buying into or selling in a seller's market?

South African home buyers and property trend watchers in the bigger centres are now regularly told that property market conditions have improved sufficiently to justify the belief that they are now in a seller’s market.

How does a potential home seller (or for that matter a buyer) decide if this is in fact true of the area in which he lives or hopes to live?

An initial, very obvious question to ask, said Tony Clarke, Managing Director of the Rawson Property Group is, “Are there any repossessed homes still awaiting sale in the area?” 

If there are several such forced sales on the go, he said, it is a sure sign that the area has still not fully recovered from the downturn and cannot be described as a seller’s market. At the moment there are relatively few such areas in South Africa but the question regarding them is nevertheless worth asking.

“Bear in mind,” he said, “that repossessed homes usually sell below their true market value and therefore not only spoil the area’s image but will in all probability also lower the average price of homes in their vicinity.”

The second question to ask, said Clarke, is “How long are homes taking to sell?”

“In the Rawson Property Group we have a number of franchises that are now regularly selling homes within two to four weeks of their being listed.  We also have some which quite frequently report sales taking place within 48 to 72 hours of the property coming onto the market.  Quite obviously in such areas, if stock is available, it has to be recognized that the market is very much slanted towards the seller.”

However, said Clarke, in general he would still accept the current rule of thumb that if, in today’s market conditions, a home sells within four months its area could be described as being a seller’s market and if it takes longer than six months to sell, the market cannot be described as being in favour of the seller.

Another factor to be assessed (if possible) is the general prosperity of the area in which the house is sited.  For example, said Clarke, now that the platinum mine strikes are over, Rustenburg property is already beginning to rise in price again.  Similarly, he said, Johannesburg’s CBD property, where massive Third World type trading is now prevalent throughout, is also seeing a significant rise in prices.

Clarke added that if, as he has suggested, many areas are now quite decidedly in a seller’s market, the next question to be asked is, “How long will these conditions last?”

“In answering this question, he said, “one has to refer to the major bank analysts and the consensus of opinion among them is that the tightness of today’s economy, rising interest rates, severe stock shortages and the banks’ very cautious approach to awarding loans will probably result in slower sales but also in continually rising prices in the year ahead.  Demand at the lower levels of the price spectrum is so strong that it is bound to affect price growth.  It would also be wise, I believe, to accept that growth will, as the banks have predicted, be only around 7 or 8% for much of the remainder of this year.”


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK